$TEAM · Atlassian Corp
Atlassian filed its 10-Q for Q1 FY2027 (quarter ended September 30, 2026). Total revenue rose 23.7% YoY to $1.772B, driven by subscription revenue up 24% to $1.698B. The company swung to net income of $90.7M (diluted EPS $0.35) from a $51.9M loss a year earlier, with operating income of $188.8M versus a $96.3M loss. Gross margin improved to 85.2% from 82%.
- Revenue rose 23.7% YoY to $1.772B, with subscription revenue up 24% to $1.698B.
- Net income swung to $90.7M from a $51.9M loss a year ago.
- Operating income was $188.8M versus a $96.3M loss in the prior-year quarter.
- Gross margin improved to 85.2% from 82%.
- Repurchased $588.0M of Class A stock in the quarter, up from $252.8M a year ago.
Extended-hours last trade $154.17, +0.32% vs regular close, despite the regular session closing -16.15% at $153.68. The modest after-hours uptick suggests the strong profitability swing was largely anticipated or offset by the day's selloff.
Atlassian delivered a rare combination of accelerating revenue growth and a swing to profitability, but a sequential drop in deferred revenue raises questions about forward momentum.
Atlassian's 24% subscription growth and swing to profitability contrast with slower-growing legacy enterprise software peers, reflecting continued cloud and AI-driven demand.
Deferred revenue fell $268M sequentially to $2.39B, signaling potential deceleration in billings. Over 90% of revenue came from existing customers, highlighting reliance on expansion rather than new-customer acquisition.